Celebrations may be in order for Pierre et Vacances SA (EPA:VAC) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The stock price has risen 5.9% to €6.68 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
After the upgrade, the four analysts covering Pierre et Vacances are now predicting revenues of €1.7b in 2022. If met, this would reflect a major 83% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 98% to €0.92. However, before this estimates update, the consensus had been expecting revenues of €1.5b and €0.92 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.
The consensus price target held steady at €6.85 despite the upgrade to revenue forecasts and ongoing losses. Analysts seem to think the business is otherwise performing roughly in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Pierre et Vacances, with the most bullish analyst valuing it at €12.00 and the most bearish at €2.40 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Pierre et Vacances' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 234% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 7.0% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.8% annually. So it looks like Pierre et Vacances is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Pierre et Vacances is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Pierre et Vacances.
Better yet, Pierre et Vacances is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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